David Cameron today unveiled Big Society Capital, which he described as “an important milestone in the government’s drive to grow the economy and build a bigger, stronger society”.
Big Society Capital has ?600m. An estimated £400m of this will come from unclaimed cash left dormant in bank accounts for more than 15 years and £200m will come from the UK’s four largest high-street banks: Barclays; Lloyds; HSBC; and RBS.
The fund will back social enterprises that prove they can repay an investment through the income they generate.
“For years, the City has been associated with providing capital to help businesses to expand. Today, this is about supplying capital to help society expand,” says the PM. Just as finance from the City has been essential to help businesses grow and take on the world, so finance from the City is going to be essential to helping tackle our deepest social problems.”
Venture capitalist Sir Ronald Cohen, who is Big Society Capital’s chairman, says the fund aims to transform the flow of capital into the social sector: ?What we ve done for business entrepreneurs we must now do for social entrepreneurs,” he explains.
Big Society Capital is an organisation run independently from the government. Financing decisions will be made by an impartial investment committee.
The fund has already agreed investments worth £3.6m in five separate schemes, including the Community Generation Fund, which supports the development of renewable energy infrastructure, such as solar panels and biomass boilers, for local communities.